Zacks Investment Research downgraded shares of Kellogg’s (NYSE:K) from a buy rating to a hold rating in a research note released on Friday.
According to Zacks, “Kellogg’s cost savings from its Project K and ZBB have been supporting renovation, innovation, brand support and margins. Kellogg remains on track to achieve its 2018 profit-margin goal of 18%. In order to improve its sales performance, the company is investing in brand building such as digital media, consumer promotions and traditional advertising. Kellogg is also channeling funds toward product and packaging innovation as well as reformulation of many existing products to keep up with the rapidly changing views of consumers regarding health and wellness. Although cost savings are providing support for margin expansion, a weak top line is limiting Kellogg’s ability to leverage it. Meanwhile, its shares have outperformed industry in the past six months and current year earnings estimates have been trending upward over the last 60 days.”
A number of other research firms have also issued reports on K. Piper Jaffray reiterated a neutral rating and set a $77.00 price objective (up previously from $72.00) on shares of Kellogg’s in a research note on Thursday, February 15th. Bank of America lifted their price objective on shares of Kellogg’s from $66.00 to $69.00 and gave the company an underperform rating in a research note on Friday, February 9th. Barclays reiterated a sell rating and set a $69.00 price objective on shares of Kellogg’s in a research note on Sunday, February 11th. DZ Bank lowered shares of Kellogg’s from a buy rating to a hold rating in a research note on Friday, December 8th. Finally, Morgan Stanley lifted their price objective on shares of Kellogg’s from $69.00 to $70.00 and gave the company an equal weight rating in a research note on Friday, February 9th. Four equities research analysts have rated the stock with a sell rating, nine have assigned a hold rating and six have assigned a buy rating to the stock. The company presently has an average rating of Hold and a consensus target price of $73.65.
Kellogg’s (NYSE:K) last announced its quarterly earnings results on Thursday, February 8th. The company reported $0.96 earnings per share for the quarter, meeting analysts’ consensus estimates of $0.96. The firm had revenue of $3.21 billion for the quarter, compared to analysts’ expectations of $3.10 billion. Kellogg’s had a net margin of 9.82% and a return on equity of 70.35%. Kellogg’s’s revenue was up 3.6% compared to the same quarter last year. During the same period in the previous year, the company posted $0.92 earnings per share. equities analysts forecast that Kellogg’s will post 4.46 EPS for the current fiscal year.
The business also recently declared a quarterly dividend, which was paid on Thursday, March 15th. Investors of record on Monday, March 5th were paid a $0.54 dividend. The ex-dividend date of this dividend was Friday, March 2nd. This represents a $2.16 dividend on an annualized basis and a dividend yield of 3.36%. Kellogg’s’s dividend payout ratio (DPR) is presently 53.47%.
Kellogg’s declared that its board has approved a share repurchase program on Friday, December 15th that allows the company to repurchase $1.50 billion in shares. This repurchase authorization allows the company to reacquire shares of its stock through open market purchases. Shares repurchase programs are usually an indication that the company’s board of directors believes its stock is undervalued.
In other Kellogg’s news, major shareholder Kellogg W. K. Foundation Trust sold 205,000 shares of Kellogg’s stock in a transaction on Thursday, March 8th. The shares were sold at an average price of $69.47, for a total value of $14,241,350.00. The transaction was disclosed in a filing with the Securities & Exchange Commission, which is accessible through this link. Also, Vice Chairman Gary H. Pilnick sold 4,400 shares of Kellogg’s stock in a transaction on Friday, February 23rd. The stock was sold at an average price of $67.55, for a total transaction of $297,220.00. The disclosure for this sale can be found here. In the last ninety days, insiders sold 623,763 shares of company stock valued at $42,787,777. 1.40% of the stock is currently owned by corporate insiders.
Institutional investors have recently added to or reduced their stakes in the business. Calton & Associates Inc. acquired a new position in shares of Kellogg’s during the fourth quarter valued at $112,000. CLS Investments LLC acquired a new position in shares of Kellogg’s during the third quarter valued at $124,000. Resources Investment Advisors Inc. boosted its holdings in shares of Kellogg’s by 65.7% during the fourth quarter. Resources Investment Advisors Inc. now owns 1,859 shares of the company’s stock valued at $127,000 after acquiring an additional 737 shares during the period. SeaCrest Wealth Management LLC acquired a new position in shares of Kellogg’s during the fourth quarter valued at $128,000. Finally, Vestpro Financial Partners Inc. dba CPF Texas acquired a new position in shares of Kellogg’s during the fourth quarter valued at $163,000. 91.87% of the stock is owned by hedge funds and other institutional investors.
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Kellogg’s Company Profile
Kellogg Company, together with its subsidiaries, manufactures and markets ready-to-eat cereal and convenience foods. The company operates through U.S. Morning Foods, U.S. Snacks, U.S. Specialty, North America Other, Europe, Latin America, and Asia Pacific segments. Its principal products include cookies, crackers, savory snacks, toaster pastries, cereal bars, granola bars and bites, fruit-flavored snacks, ready-to-eat cereals, frozen waffles, and veggie foods.
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